How to Build a Home in Arkansas With Bad Credit

Building a Home

Building a house with bad credit presents a challenge in Arizona as well as other parts of the country. There are ways to meet this challenge with a bit of creativity and perseverance. It is possible to build a home in Arizona or anywhere with bad credit.

Things You'll Need

• Credit report List of assets

Instructions

1. Determine what assets you may have that will help you qualify for a loan. Do you own land, stocks or vehicles? Make a detailed list of all property that can be used as collateral.

2. Research government websites, such as HUD, to determine if you may qualify for assistance.

3. Choose a bank, or banker, that you may already have a personal relationship with. If you've been successfully banking at a certain bank for years, then that should be your first stop. If your parents know a banker or have a solid relationship with a bank, consider this an option. Personal relationships can be helpful when you are asking for a loan and your credit is bad.

4. Sit down with your personal banker to discuss any options for a bank loan that may exist for you. Depending upon your banking institution, you may qualify for a high interest short term loan as a bridge for building your home, using your land or other assets as collateral. You may also be able to use a co-signator for the loan. Discuss this option with your banker.

5. Look at your current finances and find ways to dedicate a certain amount of money each month towards building your new home. Rent a less expensive apartment, move in with your parents, or take a second job.

6. Find a builder who will work with you on a 'pay as you go' basis to build your home. This will be easier to do if you already own the land and have a healthy down payment to offer. Check with your local home builder's association as they may offer a list of builders in your corner of Arkansas who will work with potential homeowners, regardless of having bad credit. If you already have an idea of what you can spend each month on your new home, tell the builder so he can determine if he can work with you. Also consider sweat equity as part or your monthly building expense. If you cannot help in the construction, you can certainly help with the constant clean-up required.

Tips & Warnings

• Try to accumulate a down payment by selling assets or taking a second job. The more money you can put down on a home, the more negotiating power you have with both banks and builders. Look for ways to save money each month that will add to your home building fund. Begin repairing your credit as soon as possible.

• Make sure you choose a reputable builder before handing over your down payment.

Resources

• Credit Repair Forum
• Home Builders Association of Arizona